Free Home Value Calculator Tools Assist in Planning

Using free home value calculator tools can assist in planning home improvements, refinancing or taking out home equity loans, or estimating your home value when preparing to sell. Of course, circumstances can vary considerably, so it's important to understand that free estimates may provide a starting point for planning, but they are never intended to provide an exact valuation of a particular home.  Here are some scenarios where determining home value can help in making decisions about mortgage financing or selling a home.

Home Value Important When Planning Home Improvements

Home renovation and remodeling can potentially increase home value, but it is important to compare current home value to home worth after remodeling is completed. If the total of current home value and the estimated cost of remodeling is more than the projected home value once improvements are completed, it may be wise to scale back home improvement plans. On the other hand, if the cost of the improvements will significantly increase home worth beyond the current home value and cost of improvements, remodeling can be a great investment.

Home Value and Home Equity Loans

Home equity is typically defined as the difference between current home value and what is owed in mortgage loans.  For example, a homeowner whose house is worth $300,000 with $200,000 owed on her mortgage has approximately $100,000 in home equity.  Should this homeowner borrow against all of her equity to finance a new business or make home improvements? The answer will vary according to individual circumstances, local real estate market trends, and other variables that a free home value calculator cannot consider. Homeowners often use home equity financing to consolidate high interest rate consumer debt. This can be a great idea, but retaining some home equity as a bulwark against falling home values can also enhance your financial security.

Home Worth Differs According to Sellers and Buyers

It can be difficult to separate home value in terms of real estate market conditions and personal attachment to a home. Although the memories of living in a home and raising a family there can be priceless, home value is determined by supply and demand for homes in a particular area, and extraneous factors such as proximity to schools, shopping, and employment venues.

Home value calculator tools can provide estimated home value based on age, size, and location of a home. However, mortgage lenders and real estate professionals rely on appraisals or current market analyses to determine actual home value.

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.